On May 10, 2010, a 3-judge panel of the U.S. Court of Appeals for the Federal Circuit (Circuit Judges Newman, Rader, and Linn) issued its unanimous decisions in two cases that should solidify as to when a patent covering a drug product is eligible for a Patent Term Extension (“PTE”). In each case – Photocure ASA v. Kappos and Ortho-McNeil Pharmaceutical, Inc. v. Lupin Pharmaceuticals, Inc. – the Federal Circuit affirmed (here and here) the district court’s decision concerning PTE eligibility for the particular product at issue.

Both the Photocure and Ortho-McNeil cases concern the proper interpretation of 35 U.S.C. § 156(a)(5)(A). That provision states that the term of a patent claiming a drug shall be extended from the original expiration date of the patent if, among other things, “the permission for the commercial marketing or use of the product . . . is the first permitted commercial marketing or use of the product under the provision of law under which such regulatory review period occurred.”

Over the past few years, the U.S. Patent and Trademark Office (“PTO”) has heavily relied on decisions by the U.S. Court of Appeals for the Federal Circuit in Fisons v. Quigg, 8 U.S.P.Q.2d 1491 (D.D.C.1988), aff’d876 F.2d 99 U.S.P.Q.2d 1869 (Fed.Cir.1989), and Pfizer Inc. v. Dr. Reddy’s Labs., 359 F.3d 1361 (Fed. Cir. 2004) (“Pfizer II”) to support the Office’s interpretation of the term “product” in 35 U.S.C. § 156(a)(5)(A) to mean “active moiety” (i.e., the molecule in a drug product responsible for pharmacological action, regardless of whether the active moiety is formulated as a salt, ester, or other non-covalent derivative) rather than “active ingredient” (i.e., the active ingredient physically found in the drug product, which would include any salt, ester, or other non-covalent derivative of the active ingredient physically found in the drug product). In contrast, the Federal Circuit’s 1990 decision in Glaxo Operations UK Ltd. v. Quigg, 894 F.2d 392, 13 USPQ2d 1628 (Fed. Cir. 1990) (“Glaxo II”), construed the term “product” in 35 U.S.C. § 156(a)(5)(A) to mean “active ingredient.”

PhotoCure stems from the PTO’s denial of a PTE for U.S. Patent No. 6,034,267 (“the ‘267 patent”) covering the drug product METVIXIA (methyl aminoevulinate hydrochloride). Applying the active moiety interpretation of the law, the PTO determined that METVIXIA does not represent the first permitted commercial marketing or use of the product because of FDA’s previous approval of an NDA for Dusa Pharmaceuticals Inc.’s LEVULAN KERASTICK (aminolevulinic acid HCl) Topical Solution, which contains the active moiety aminolevulinic acid (“ALA”). Thus, according to the PTO, METVIXIA did not represent the first permitted commercial marketing or use of ALA and the ‘267 patent was ineligible for a PTE. PhotoCure filed a lawsuit in the U.S. District Court for the Eastern District of Virginia challenging the PTO’s decision.

In March 2009, the court ruled in PhotoCure’s favor. In reaching its decision that the PTO’s decision to deny a PTE was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law” under the Administrative Procedure Act, the court explained that it must determine whether it is required to follow the Federal Circuit’s ruling in Glaxo II or Pfizer II. The court stated that “[i]mportantly, Pfizer II postdated Glaxo II and was a panel decision that the Federal Circuit declined to hear en banc. ‘[The Federal Curcuit] has adopted the rule that prior decisions of a panel of the court are binding precedent on subsequent panels unless and until overturned in banc. Where there is a direct conflict, the precedential decision is the first’” (internal citation omitted). As a result, the court applied the “active ingredient” interpretation adopted in Glaxo II and determined that “the ‘267 patent covering Metvixia satisfies § 156(a)(5)(A), and that the USPTO’s decision to apply the active moiety interpretation and deny PhotoCute a [PTE] under this provision was contrary to the plain meaning of the statute and thus not in accordance with the law.” The PTO appealed the decision to the Federal Circuit.

The PTO argued in its Federal Circuit briefs (here and here) that Pfizer II is controlling, and that even if Pfizer II is not controlling, the PTO persuasively interpreted active ingredient to mean active moiety and correctly denied a PTE for the ‘267 patent.

The Federal Circuit, in a mere 7-page opinion, sided with PhotoCure and the district court. “[E]ven on the PTO’s incorrect statutory interpretation,” according to the Court, “MAL would meet the criteria for term extension, for, as the ’267 patent illustrates, the pharmacological properties of MAL differ from those of ALA, supporting the separate patentability of the MAL product. MAL hydrochloride is a different chemical compound from ALA hydrochloride, and it is not disputed that they differ in their biological properties, warranting separate patenting and separate regulatory approval, although their chemical structure is similar.” Thus, the ruling in Glaxo II that the term “product” in 35 U.S.C. § 156(a)(5)(A) means “active ingredient” is controlling, and the decision in Pfizer II is not and is not due any deference:

[Pfizer II] did not hold that extension is not available when an existing product is substantively changed in a way that produces a new and separately patentable product having improved properties and requiring full FDA approval. To the contrary, the disputed product in [Pfizer II] was a salt that was included in the Pfizer patent claims and for which Pfizer had provided data to the FDA. The decision in [Pfizer II] did not change the law of §156, and [Pfizer II] did not concern a different, separately patented product requiring full regulatory approval. . . .

The district court observed that Chevron does not apply because the statute is unambiguous, and that Skidmore deference is not warranted because the PTO’s interpretation is neither persuasive nor consistent. We agree with the district court. . . . Even if some level of deference were owed to the PTO’s interpretation, neither Chevron nor Skidmore permits a court to defer to an incorrect agency interpretation.

Ortho-McNeil Pharmaceutical, Inc. v. Lupin Pharmaceuticals, Inc.

Lupin is an appeal of the U.S. District Court for the District of New Jersey’s May 2009 decision that the PTE granted by the PTO with respect to U.S. Patent No. 5,053,407 (“the ‘407 patent”) covering Ortho McNeil’s (“Ortho’s”) LEVAQUIN (levofloxacin) is valid. Levofloxacin is an enantiomer in the previously approved Ortho racemate drug product FLOXIN (ofloxacin). Lupin challenged the ‘407 patent PTE in the context of ANDA Paragraph IV Certification patent infringement litigation on the grounds that the PTE is invalid because FDA previously approved the active ingredient levofloxacin when the Agency approved ofloxacin.

Although the PTO was not a party to the district court litigation, the Office submitted an amicus brief in support of Ortho in the Federal Circuit appeal, arguing that ‘407 patent PTE grant was valid and consistent with the Office’s active moiety interpretation of 35 U.S.C. § 156(a)(5)(A). Indeed, the PTO’s decision to grant a PTE for the ‘407 patent was consistent with previous PTE decisions concerning a patent covering an enantiomer of a previously approved racemate. For example, PTEs have been granted with respect to patents covering NEXIUM (esomeprazole magnesium), LEXAPRO (escitalopram oxalate), BETAXON (levobetaxolol HCl), XOPENEX (levalbuterol HCl), and REDUX (dexfenfluramine).

In affirming the district court’s decision, the Federal Circuit once again gave its approval of the Glaxo II decision and its “active ingredient” interpretation of the PTE statute, stating that “[w]e discern no basis for challenging these established FDA and PTO practices. The FDA and PTO practices are in accordance with [Glaxo II], where the court held that “product” as used in §156(a) is the active ingredient present in the drug.”

Among other things, Lupin had argued that the status of enantiomers with respect to PTE eligibility was changed by the 2007 FDA Amendment Act (“FDAAA”). FDAAA amended the FDC Act to add § 505(u), which permits the sponsor of an NDA for an enantiomer (that is contained in a previously approved racemic mixture) containing full reports of clinical investigations conducted or sponsored by the applicant to “elect to have the single enantiomer not be considered the same active ingredient as that contained in the approved racemic drug,” and thus be eligible for five-year new chemical entity exclusivity. The Court was not convinced, stating that “[n]o support for this theory appears in the legislative record, or elsewhere. Lupin’s interpretation would change the long-standing term-extension policy of the FDA and the PTO; such a far-reaching change is not achieved by legislative silence.”

Future Effects . . . .

The effects of these decisions, and the PhotoCure decision in particular, will likely be felt very soon by the PTO unless the decisions are further challenged and overturned. For example, AstraZeneca has argued that the district court’s PhotoCure decision supports the company’s efforts to obtain a PTE for U.S. Patent No. 5,817,338 (“the ‘338 patent”) covering PRILOSEC OTC (omeprazole magnesium) Delayed-Release Tablets.

As we previously reported, the PTO determined that the ‘338 patent is not eligible for a PTE because the PRILOSEC OTC NDA was not the first permitted commercial marketing or use of omeprazole. (The PTO also denied a PTE because the PTE application was not timely submitted. This is an issue currently being litigated in the context of a PTE for ANGIOMAX (bivalirudin).) That is, the PTO applied an “active moiety” interpretation of the PTE statute and concluded that PRILOSEC OTC is not the first permitted commercial marketing or use of the product, because the term “product” in the PTE statute ultimately means “the underlying molecule or ion (excluding those appended portions of the molecule that cause it to be a salt or ester) responsible for the physiological or pharmacological action of the drug.” The Photocure and Ortho-McNeil decisions presumably moot the PTO’s PTE denial on this issue.